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Regardless of your investment timeframe, market volatility can keep you calm if you invest in stocks and bonds. But that's exactly what investors need to do in times of turbulence.
Consider it: The S&P 500 (^GSPC) recorded the worst first 100 days of the new government in more than 50 years, down more than 7% from the inauguration date on January 20 until it reached the market on April 30. However, after news that China and the United States agreed to temporarily reduce tariffs, the market began to rebound, and all the losses of S&P, and then lost all the losses.
"Wealth in Life," said Preston Cherry, CEO of Concurrent Wealth Management, the concerns about market volatility are effective. He noted that tariffs could impact consumer spending and long-term financial plans, making retirement preparation more difficult.
Still, Cherry emphasizes the importance of keeping investing. "Don't panic," he said in the April 29 episode of the Decoded Retirement Drama (see the video above or listen below). "I know it's hard."
Read more: How to protect your funds during economic turmoil, stock market volatility
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Investors who exited the market during a downturn lost risk recovery.
“At least some portfolios should be exposed to the market during recovery days and periods after the long-term shock,” he said.
However, Cherry does not advocate strict buying strategies. Instead, he supports tactical flexibility. Investors can create “slight pivots”, such as adding cash or adjusting allocations to manage risks under uncertain conditions.
“It’s nothing wrong to make a tactical shift and raise some cash to help smooth the sideways or bump in the economy over the next six to 18 months,” he said.
He added that having cash on hand can help investors avoid selling off losses during downturns and provides flexibility without disrupting daily life.
Cherry also pointed out that a downward market could open the door to strategic tax plans. For example, a Roth IRA conversion may be more advantageous when the portfolio value is lowered. Tax cuts in taxable accounts can also help offset the gains.
He also encourages some gains in strong markets, especially in taxable brokerage accounts.
"It's not all the gains, it's some, because winning a little bit feels good."
Another key point that Cherry highlights is understanding where you are on your retirement schedule. If you are within four to five years of retirement, whether before or after retirement, it is crucial to revisit your investment strategy and risk tolerance.
For example, if you rely on a target date fund, check out its asset allocation. Make sure the fund's target date is consistent with your expected retirement year and understand how the fund moves from stocks to fixed income as it approaches that date. This helps ensure that the fund's sliding path meets your actual retirement needs.
Read more: What is wealth management and is this suitable for you?
In the podcast, Cherry also discusses a framework for managing your financial journey and improving relationships with money during times of turbulence.
"Everyone needs a system," he said, emphasizing "Six A": acknowledge, acknowledge, act, stability, approach and achievement.
First, you need to recognize your financial and life journey. "It doesn't necessarily have to come from a place of judgment or suffering," he said of the "acceptance" step. "It could also start from a high point, like entering retirement."
Next is to acknowledge your emotional state, whether it’s regret, shame or just a desire to improve. Cherries compare it to “cleaning the taste,” such as drinking a glass of water between tastings, resetting and preparing for what’s next.
Investors can take action after acknowledging their emotions. "That's the fun part," he said. "Now you say, 'Okay, my taste buds are clean. Now I can move on.'"
The final step - staying consistent, sailing and accomplishment - is about synchronizing your life and money.
Cherry encourages individuals to define their own wishes: What is retirement like? What does balancing mean for members of the Gen X or sandwich generation? Then, take steps to achieve it.
He also reminds people to avoid comparisons.
"A lot of people say, 'I look to the left, I'm looking at Jones.' "My father always says, 'Keep blind, son. Look straight. 'You have permission to thrive and prosper in the way you want. ”
Every Tuesday, retired expert and financial educator Robert Powell provides you with tools to plan for the future Decode Retirement. You can do it in our Video Center Or watch yours Preferred streaming services.
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